My Take On The Database Security Market Challenges

Yesterday, Adrian posted his take on a conversation we had last week. We were headed over to happy hour, talking about the usual dribble us analyst types get all hot and bothered about, when he dropped the bombshell that one of our favorite groups of products could be in serious trouble.

For the record, we hadn’t started happy hour yet.

Although everyone on the vendor side is challenged with such a screwed up economy, I believe the forces affecting the database security market place it in particular jeopardy. This bothers me, because I consider these to be some of the highest value tools in our information-centric security arsenal.

Since I’m about to head off to San Diego for a Jimmy Buffett concert, I’ll try and keep this concise.

Database security is more a collection of markets and tools than a single market. We have encryption, Database Activity Monitoring, vulnerability assessment, data masking, and a few other pieces. Each of these bits has different buying cycles, and in some cases, different buying centers. Users aren’t happy with the complexity, yet when they go shopping the tend to want to put their own car together (due to internal issues) than buy the full product.

Buying cycles are long and complex due to the mix of database and security. Average cycles are 9-12 months for many products, unless there’s a short term compliance mandate. Long cycles are hard to manage in a tight economy.

It isn’t a threat driven market. Sure, the threats are bad, but as I’ve talked about before they don’t keep people from checking their email or playing solitaire, thus they are perceived as less.

The tools are too technical. I’m sorry to my friends on the vendor side, but most of the tools are very technical and take a lot of training. These aren’t drop in boxes, and that’s another reason buying cycles are long. I’ve been talking with some people who have gone through vendor product training in the last 6 months, and they all said the tools required DBA skills, but not many on the security side have them.

They are compliance driven, but not compliance mandated. These tools can seriously help with a plethora of compliance initiatives, but there is rarely a checkbox requiring them. Going back to my economics post, if you don’t hit that checkbox or clearly save money, getting a sale will be rough.

Big vendors want to own the market, and think they have the pieces. Oracle and IBM have clearly stepped into the space, even when products aren’t as directly competitive (or capable) as the smaller vendors. Better or not, as we continue to drive towards “good enough” many clients will stop with their big vendor first (especially since the DBAs are so familiar with the product line).

There are more short-term acquisition targets than acquirers. The Symantecs and McAfees of the world aren’t looking too strongly at the database security market, mostly leaving the database vendors themselves. Only IBM seems to be pursuing any sort of acquisition strategy. Oracle is building their own, and we haven’t heard much in this area out of Microsoft. Sybase is partnered with a company that seems to be exiting the market, and none of the other database companies are worth talking about. The database tools vendors have hovered around this area, but outside of data masking (which they do themselves) don’t seem overly interested.

It’s all down to the numbers and investor patience. Few of the startups are in the black yet, and some have fairly large amounts of investment behind them. If run rates are too high, and sales cycles too low, I won’t be surprised to see some companies dumped below their value. IPLocks, for example, didn’t sell for nearly it’s value (based on the numbers alone, I’m not even talking product).

There are a few ways to navigate through this, and the companies that haven’t aggressively adjusted their strategies in the past few weeks are headed for trouble.

I’m not kidding, I really hated writing this post. This isn’t a “X is Dead” stir the pot kind of thing, but a concern that one of the most important linchpins of information centric security is in probable trouble. To use Adrian’s words:

But the evolutionary cycle coincides with a very nasty economic downturn, which will be long enough that venture investment will probably not be available to bail out those who cannot maintain profitability. Those that earn most of their revenue from other products or services may be immune, but the DB Security vendors who are not yet profitable are candidates for acquisition under semi-controlled circumstances, fire-sale or bankruptcy, depending upon how and when they act.